Correlation Between Compugroup Medical and STOMO MITSUI

Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and STOMO MITSUI at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Compugroup Medical and STOMO MITSUI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compugroup Medical SE and STOMO MITSUI FINL, you can compare the effects of market volatilities on Compugroup Medical and STOMO MITSUI and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Compugroup Medical with a short position of STOMO MITSUI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and STOMO MITSUI.

Diversification Opportunities for Compugroup Medical and STOMO MITSUI

0.3

Correlation Coefficient

Compugroup Medical  STOMO MITSUI

Weak diversification

The 3 months correlation between Compugroup and STOMO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and STOMO MITSUI FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOMO MITSUI FINL and Compugroup Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Compugroup Medical SE are associated (or correlated) with STOMO MITSUI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOMO MITSUI FINL has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and STOMO MITSUI go up and down completely randomly.

Pair Corralation between Compugroup Medical and STOMO MITSUI

Assuming the 90 days horizon Compugroup Medical SE is expected to generate 5.42 times more return on investment than STOMO MITSUI. However, Compugroup Medical is 5.42 times more volatile than STOMO MITSUI FINL. It trades about 0.27 of its potential returns per unit of risk. STOMO MITSUI FINL is currently generating about -0.14 per unit of risk. If you would invest  1,558  in Compugroup Medical SE on October 5, 2024 and sell it today you would earn a total of  612.00  from holding Compugroup Medical SE or generate 39.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Compugroup Medical SE  vs.  STOMO MITSUI FINL

Compugroup Medical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compugroup Medical SE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compugroup Medical reported solid returns over the last few months and may actually be approaching a breakup point.

STOMO MITSUI FINL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in STOMO MITSUI FINL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, STOMO MITSUI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compugroup Medical and STOMO MITSUI

The main advantage of trading using opposite Compugroup Medical and STOMO MITSUI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, STOMO MITSUI can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in STOMO MITSUI will offset losses from the drop in STOMO MITSUI's long position.

The idea behind Compugroup Medical SE and STOMO MITSUI FINL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.